Hi guys
I was wondering if any fellow experienced Futures traders can help me. I've been a consistently profitable trader at a prop shop for 2 years now, and I am looking to get a little more involved with the Bund and European session.
Now, as far as it goes, at my prop shop, every single experienced trader I talk to says "do not trade the bund. get away from it."
I don't want to just give up on it. I have no interest in trading it outright, though (I think thats impossible for me living across continents with laggy speed). I don't live in Europe or the U.S.A so I was wondering what are decent spreads with the Bund and what is some basic rationale you guys use with it?
Something I experimented with:
- I recently tried spreading the French 10-year bonds with the German 10-year Bund. It was hell.
-It's 10 euro a tick on a 1-lot and the spread blew 55 ticks on the first night I traded it! 5.5 basis points! How the f*ck can Government risk change THAT MUCH in a single session! Holy moly. They have the same f*cking interest rates and currency.
-It was disastrous. And I realised that the risk/reward on that thing is blown out hard for a day-trader and single session mentality. Even two-session mentality isn't enough.
-And what is the f*cking rationale? There was NO relative value with the CAC40 versus the DAX up/down values, or the Euro being a risk on or risk off tool. It was just random bullsh*t.
It took 1500 Euros from me and I averaged SLOWLY. There was no rationale. The French PMI was BETTER and they bought it up. The german PMI was WORSE and they sold the Bund! Hell. Pure Hell. So I learned my lesson, the French bonds with the Bund is a dirty, dirty spread and you need to find something you believe in that works.
I was wondering if anyone out there knows what prop shop spreaders like to do with-in the European or U.S. region? Generally I want to keep legging risk to a minimum, though I know it's not always a guarantee.
I would specifically like to invite anyones thoughts on spreading 10-year Government Bonds (U.S. Tnote and German Bund alike). Also I would like to ask:
1. Has anyone traded the Swiss 10-year Bonds? {Their yield is 0.23% and it hardly moves so you might need like a 3:1 ratio with the Bund)
2. Has anyone traded the British 10-year Gilt Bonds? Spread them with the Bund? Or T-notes? Thoughts?
3. What about any other spreads? How is the consistency with Italian 10-year BTP Bond and the Bund or something else?
Basically if anyone has any thoughts or information they could share it would be great. I have already experimented and tried, and my general conclusion is that the Bund is a f*cking piece of sh*t and to avoid it at all times whenever possible. Trade anything else you can instead. But I am hoping my conclusion is wrong!
I was also wondering if there's any logical rationale to some basic spread strategies as well. For example, if you're trading the Australian 10-year bonds and hedging them with the U.S. T-notes, if the S&P500 rallies you quite often see the Aussie 10-years selling off pre-emptively more than the U.S. T-notes. And there's the Aussie dollar currency factor as well (if it drops by 20-30 ticks you'll see them go bid and it try to move up half a basis point)/
So for anyone who does trade a spread, can you please share what you look at/don't look at? Equity & Currency correlation? Price action? Other local yield curves?
Thanks for anyones help.
I was wondering if any fellow experienced Futures traders can help me. I've been a consistently profitable trader at a prop shop for 2 years now, and I am looking to get a little more involved with the Bund and European session.
Now, as far as it goes, at my prop shop, every single experienced trader I talk to says "do not trade the bund. get away from it."
I don't want to just give up on it. I have no interest in trading it outright, though (I think thats impossible for me living across continents with laggy speed). I don't live in Europe or the U.S.A so I was wondering what are decent spreads with the Bund and what is some basic rationale you guys use with it?
Something I experimented with:
- I recently tried spreading the French 10-year bonds with the German 10-year Bund. It was hell.
-It's 10 euro a tick on a 1-lot and the spread blew 55 ticks on the first night I traded it! 5.5 basis points! How the f*ck can Government risk change THAT MUCH in a single session! Holy moly. They have the same f*cking interest rates and currency.
-It was disastrous. And I realised that the risk/reward on that thing is blown out hard for a day-trader and single session mentality. Even two-session mentality isn't enough.
-And what is the f*cking rationale? There was NO relative value with the CAC40 versus the DAX up/down values, or the Euro being a risk on or risk off tool. It was just random bullsh*t.
It took 1500 Euros from me and I averaged SLOWLY. There was no rationale. The French PMI was BETTER and they bought it up. The german PMI was WORSE and they sold the Bund! Hell. Pure Hell. So I learned my lesson, the French bonds with the Bund is a dirty, dirty spread and you need to find something you believe in that works.
I was wondering if anyone out there knows what prop shop spreaders like to do with-in the European or U.S. region? Generally I want to keep legging risk to a minimum, though I know it's not always a guarantee.
I would specifically like to invite anyones thoughts on spreading 10-year Government Bonds (U.S. Tnote and German Bund alike). Also I would like to ask:
1. Has anyone traded the Swiss 10-year Bonds? {Their yield is 0.23% and it hardly moves so you might need like a 3:1 ratio with the Bund)
2. Has anyone traded the British 10-year Gilt Bonds? Spread them with the Bund? Or T-notes? Thoughts?
3. What about any other spreads? How is the consistency with Italian 10-year BTP Bond and the Bund or something else?
Basically if anyone has any thoughts or information they could share it would be great. I have already experimented and tried, and my general conclusion is that the Bund is a f*cking piece of sh*t and to avoid it at all times whenever possible. Trade anything else you can instead. But I am hoping my conclusion is wrong!
I was also wondering if there's any logical rationale to some basic spread strategies as well. For example, if you're trading the Australian 10-year bonds and hedging them with the U.S. T-notes, if the S&P500 rallies you quite often see the Aussie 10-years selling off pre-emptively more than the U.S. T-notes. And there's the Aussie dollar currency factor as well (if it drops by 20-30 ticks you'll see them go bid and it try to move up half a basis point)/
So for anyone who does trade a spread, can you please share what you look at/don't look at? Equity & Currency correlation? Price action? Other local yield curves?
Thanks for anyones help.
